A meeting of the Finance-Auditing Committee was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Thursday, January 21, 2010, at 10:18 a.m., Chair Stroeh presiding.

In memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith outlined commitments and disbursements made on behalf of the District, noting that there were no commitments and/or expenditures to ratify for the period December 1, 2009, through December 31, 2009. The report also included a copy of the District’s Investment Report from PFM Asset Management LLC (PFM). A copy of the staff report, with attachments, is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Nancy Jones reported that economic recovery is expected to be slow. The Gross Domestic Product is lower and unemployment higher than expected, with California’s unemployment being higher than the national average. She stated that jobs are still being lost, but at a lower rate than previously. She stated that the short-term U. S. Treasury yield curve is very steep due to investor worries over inflationary pressures. She stated that for 2010, treasury notes are expected to remain between .5% and 2.5%. She reported that the District’s portfolio is still earning 3.17%.

Discussion ensued, including the following comments and inquiries:

Director Grosboll inquired as to whether there were allowed investments that were not being made due to not being secure investments. In response, Ms. Jones stated that the District portfolio now has fewer corporate investments than in the past. She explained that predicting which corporations will remain successful in future months and years is difficult in an uncertain economy. She stated that, while some corporations remain listed as secure investments, the rates of return are very low and comparable to the rates received for much more secure investments.

President Boro inquired as to whether the District has invested in Federal Home Loan, Fannie Mae and Freddie Mac. Ms. Jones responded affirmatively.

Staff recommended and the Committee concurred by motion made and seconded by Directors BORO/COCHRAN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the following actions by the Auditor-Controller:

a.

The Board of Directors has no commitments and/or expenditures to ratify for the period December 1, 2009, through December 31, 2009;

b.

Ratify investments made by the Auditor-Controller during the period December 9, 2009, through January 11, 2010, as follows:

Security

Purchase Date

Maturity Date

Original Cost

Percent Yield

Calyon North America, Inc., Commercial Paper

12/28/09

03/29/10

6,347,708.95

0.21

c.

c. Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between January 12, 2010, and February 16, 2010, as well as the investment of all other funds not required to cover expenditures that may become available; and,

Authorize a Budget Transfer Relative to Execution of the First Amendment to the Services Agreement with Verizon Business Network Services, Inc., Regarding Request for Proposals (RFP) No. 2010-D-3, Installation Services for Nortel Switch Upgrade, to Extend the Term of the Service Warranty

In a memorandum to Committee, Electrical Superintendent Kevin Raddatz, General Manager/Bridge Division Kary H. Witt, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith reported on staff’s recommendation for the Committee’s concurrence with a budget transfer in the amount of $54,768.00 from the District’s FY 09/10 Capital Budget to the FY 09/10 District Division Operating Budget, relative to the First Amendment to the Services Agreement with Verizon Business Network Services, Inc., regarding the above-referenced RFP, to extend the term of the service warranty. The staff report stated that sufficient funds are available in the Telephone Switch Replacement project to fund this transfer. A copy of the staff report is available in the Office of the District Secretary and on the District’s web site.

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/PAHRE to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends the Board of Directors authorize a budget transfer in the amount of $54,768.00, from the FY 09/10 District Capital Budget to the FY 09/10 District Division Operating Budget, relative to execution of the First Amendment to the Services Agreement with Verizon Business Network Services, Inc., regarding Request for Proposals No. 2010-D-3, Installation Services for Nortel Switch Upgrade, to extend the term of the service warranty, with the understanding that sufficient funds are available in the Telephone Switch Replacement project to fund this transfer.

Action by the Board
Refer to Building and Operating Committee Meeting of January 21, 2010

Authorize Execution of the First Amendment to the Professional Services Agreement with JFC & Associates Relative to Request for Proposals No. 2009-FT-6, Asset Management System Consultant Services, to Provide Expanded Consultant Services

In a report to Committee, Business System Implementation Manager Marvin Miller, Deputy General Manager/Administration and Development Z. Wayne Johnson, Deputy General Manager/Ferry Transit Division James P. Swindler, Deputy General Manager/Bridge Division Kary H. Witt and General Manager Celia G. Kupersmith reported on staff’s recommendation to authorize execution of the First Amendment to the Professional Services Agreement with JFC & Associates, Waltham, Massachusetts, in the amount of $150,000.00, relative to Request for Proposals No. 2009-FT-6, Asset Management System Consultant Services, to provide expanded consultant services.

The staff report stated that a Professional Services Agreement was entered into with JFC & Associates on January 9, 2009, to configure the IBM Maximo Asset Management System purchased by the District for the Ferry Transit Division from IBM under Contract No. 2008-MD-2 on November 21, 2008. Since the award, ferries in the fleet have increased in number by 40%, expanding the scope of work for preventive maintenance plans. In addition, implementation of the Maximo System at the Bridge Division will require consultant services to assist staff with configuration and implementation of the System. The staff report states that adding the Bridge Division to the existing contract, rather than developing and advertising a separate RFP, is in the District’s best interests. JFC & Associates has extensive Maximo experience, technical expertise and sufficient staff to meet District needs; and, has demonstrated the ability to work well with District personnel. The staff report states that sufficient funds are available in the FY 09/10 District Division Capital Budget. A copy of the staff report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Marvin Miller, the project manager, briefly summarized the staff recommendation.

Discussion ensued, including the following comments and inquiries:

Director Stroeh inquired as to whether this system could be described as an efficiency system. Mr. Miller responded affirmatively.

President Boro inquired as to whether the system would aid the District in controlling its assets. Mr. Miller responded affirmatively.

Director Pahre inquired as to whether the system would control only maintenance and operations assets, having no effect on fixed assets. In response, Mr. Wire stated that a fixed asset system within the District’s accounting system tracks fixed assets. The Maximo Asset Management System will provide similar controls for preventive maintenance. He stated that these two systems are interfaced. For example, repairs can be completed in a timely fashion and tracked in the accounting system.

Staff recommended and the Committee concurred by motion made and seconded by Directors PAHRE/COCHRAN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends the Board of Directors authorize execution of the First Amendment to the Professional Services Agreement with JFC & Associates, Waltham, Massachusetts, in the amount of $150,000.00, to provide expanded consultant services relative to Request for Proposals No. 2009-FT-6, Asset Management Consultant Services, with the understanding that requisite funds are available in the FY 09/10 District Division Capital Budget.

Monthly Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares for Six Months Ending December 2009

In a memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith provided a schedule comparing categories of Bridge traffic, as well as a monthly review of Bridge traffic and tolls and transit patronage and fares, for six months ending December, 2009. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Wire provided a short explanation regarding the schedules attached to the staff report. The first schedule compares categories of Bridge traffic for December 31, 2009. The second schedule is a monthly review of Bridge traffic, tolls, transit patronage and fares for six months ending December 31, 2009. He noted that Bridge traffic has increased slightly and is the District’s main source of finances. He stated that bus patronage is down by about 15%. Ferry patronage is also down, but increased fares have helped to offset the lower number of riders.

Discussion ensued, including the following comments and inquiries:

Director Grosboll inquired as to whether anecdotal or other evidence was available to determine whether increased Bus fares have led to an increase in driving. In response, Mr. Wire stated that there has been no such indication. Ms. Mantony stated that an increase in Bus patronage occurred approximately a year ago, when gas prices increased significantly and that people have returned to driving as gas prices have fallen.

Action by the Board – None Required

5.

Monthly Review of Financial Statements for Six Months Ending December 2009

a.

Statement of Revenue and Expenses

In a memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith provided a financial statement entitled, Statement of Operating Revenues and Expenses. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

b.

Statement of Capital Programs and Expenditures

In a memorandum to Committee, Director of Capital and Grant Programs Gayle S. Prior, Auditor-Controller Joseph M. Wire and General Manager Celia G.Kupersmith provided a financial statement entitled, Statement of Capital Programs and Expenditures. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a report summarizing budget adjustments and budget transfers authorized by the Board of Directors during the three-month period from October 1, 2009, through December 31, 2009. A copy of the report, including attached charts outlining applicable budget adjustments and transfers, is available in the Office of the District Secretary and on the District’s web site.

7.

FY 09/10 Second Quarterly Report on Contracts and Change Orders/Contract Amendments Executed Under the General Manager’s Authority

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a report summarizing all contracts and change orders executed under the General Manager’s procurement authority, as set forth in the Rules of the Board, during the three-month period from October 1, 2009, through December 31, 2009. A copy of the report, including attached charts outlining applicable contracts and change orders, is available in the Office of the District Secretary and on the District’s web site.

8.

Closed Session

Attorney David Miller, at the request of Chairman Stroeh, stated that the Finance-Auditing Committee would convene in closed session as permitted by the Brown Act for purposes of discussing a matter of pending litigation, listed on the Committee agenda under the Attorney’s Report as Item No. 9., Conference with Legal Counsel – Pending Litigation, Government Code Section 54956.9(a), Report of Sterling & Clack, Betty Crutcher and Robert Crutcher vs. Golden Gate Bridge, Highway and Transportation District.

After closed session, Chairman Stroeh called the meeting to order in open session with a quorum present. Attorney Miller reported that, as noted on the agenda, the Committee met in closed session, as permitted by the Brown Act, for purposes of reviewing a matter of pending litigation. He further reported that this matter will be referred to the Board of Directors at their regularly scheduled meeting of January 22, 2010, for disposition.

9.

Public Comment

There was no public comment.

10.

Adjournment

All business having been concluded, the meeting was adjourned at 10:55 a.m.